But under a debt-for-equity deal, the two hedge funds wind up with 95 per cent of the broadcaster.

In this country, MediaWorks - which owns TV3, Four and reaches half the radio market - has also been mired in debt.

Ironbridge Capital bought MediaWorks for $741 million in 2007 at the height of the leveraged buyout boom and hit trouble after the global financial crisis in 2008.

This year, another US hedge fund, Texas Pacific Group, bought $70 million of debt in MediaWorks at a discount.

TPG launched a backdoor attempt to take over the firm, paying 70c in the dollar and setting off a tussle with Ironbridge for control of the firm.

In August, Oaktree Capital Management bought $125 million of MediaWorks debt held by Bank of Scotland International and the BNZ. It is understood to have paid 50 per cent of the face value of the debt as the banks cut their losses on MediaWorks.

Oaktree's move has brought a new dynamic to decisions about MediaWorks' eventual ownership structure.

Neither Oaktree nor TPG hold equity in MediaWorks, but the two have worked together in the past and Oaktree, TPG and Ironbridge are talking about the new shape of the company. No final decisions have been made. But a debt-for-equity deal along the lines of the one used for the restructuring of Nine Entertain-ment is looking more likely for MediaWorks.

BEAST OF BURDEN

Oaktree's involvement with both Nine and MediaWorks does not necessarily mean closer programming or other direct ties between the two. Traditionally hedge funds do not get caught up in day-to-day management.

Certainly TV3 and Nine have very different cultures.

TV culture in Australia is more extravagant, and Nine has always fancied itself as the centre of show-biz with the legacy of the big talking era when Kerry Packer ruled the roost.

People who have worked at Nine say it has never fully adapted from the days when it was unassailable market-leader and has had a free-spending culture.

Oaktree has probably recognised what Ironbridge learned soon after it bought MediaWorks in 2007. MediaWorks is a frugal broadcaster and any new owner will find it difficult to boost profits by cutting costs.

INDEPENDENCE DAY

Television New Zealand is in the throes of a strategic review of its direction for the next five years. Recently elected chief executive Kevin Kenrick has been working with the TVNZ board led by newly appointed chairman Wayne Walden and there is deep interest in the direction of the company following the departure of chief executive Rick Ellis.

Most importantly, there will be questions about whether the state broadcaster will snuggle even closer to Sky TV. Under Ellis, TVNZ developed new technological initiatives such as tvnz-on-demand, tvnz.co.nz and the ill-fated Tivo.

But many in the the TV production industry believe TVNZ has been obsessed with distribution and a focus on television content, and programming had come under the control of its marketing department, damaging the TV One brand in the process.

TVNZ is bound by Government demands for a 9 per cent return on assets. But what about the strategic alliance with Sky? Recently departed head of digital Eric Kearley, who followed Ellis to Australia, defined the relationship as co-opetition- working together and in competition.

The Sky-friendly strategy is seen as undermining the future of Freeview. Many hope Kenrick and a more involved chairman will take TVNZ on a more independent path.

SUNDAY PRAYERS

The role of news and current affairs in the future of TVNZ will be part of Kenrick's strategic review. But after a column item last week that questioned the future of Sunday, the head of news and current affairs, Ross Dagan, went public and said TVNZ was committed to the programme and long-form current affairs.

COURT SHORT

Media may have a fight on their hands maintaining the current guidelines allowing liberal access for TV cameras to cover court. It appears there is a big push behind the scenes in the legal fraternity to change the guidelines to limit TV camera access.

NZ Law Society president Jonathan Temm insists planning for a review (of sorts) is under way. A committee will be formed by Christmas, reporting in April, he says confidently. Likewise, Justice Minister Judith Collins has also spoken about a review as a fait accompli.

Yet any review will be decided by the judiciary. Senior judicial communications adviser Neil Billington said there has been no decision.

A legal source said change was inevitable and another source said the media may not be aware of the depth of feeling about TV cameras in courts. The sector is wary of moves to regulate media after the Leveson Inquiry in the UK. Lawyer-journalist Catriona MacLennan says the rules should not be changed.

ANALOGUE A GO-GO

Broadcasters acknowledge the digital switch-over may lead to New Zealanders abandoning their extra television sets. Hawkes Bay and West Coast viewers have already switched over and the rest of the South Island will follow on April 28, the lower North Island on September 29 and the top half of the North Island on December 1 next year. Estimates from the Ministry for Culture and Heritage agency Going Digital suggest 86 per cent of households are digital, with access to Sky, Freeview or Saturn.

But of those 36 per cent have one, two or three unconverted analogue TV sets in the house. It raises the question whether they will pay for digital tuners for the extra sets or if they could be dumped.

John Fellet, the chief executive of Sky, says nobody knows how many analogue secondary TVs are in homes. Fellet said Sky had been putting a marketing effort into its "multi-room" package. Sometimes the additional TV sets are used for playing games rather than watching TV.

John Drinnan is the media writer for the New Zealand Herald. A business journalist for twenty years, he has been editor of the specialist film and television title "Screen Finance" in London, focussing on the European TV and film industry. He has been writing about media in New Zealand since the deregulation of the television industry in the late 1980s. He is focused on the business side of the digital revolution in media.